Government pledges $12b to nuclear submarine precinct ahead of PM’s US visit

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The federal government will commit $12 billion to the construction of the Henderson Defence Precinct in Perth, including graving docks for nuclear submarine maintenance, in a move that will be warmly welcomed by the Trump administration.

The pledge comes as US media reports that Secretary of State Marco Rubio has assured Australia that its promise to supply nuclear submarines as part of the AUKUS pact is on track, despite a Pentagon review of the multibillion-dollar deal.

Key US officials including Defence Secretary Pete Hegseth have demanded Australia boost its defence spending from 2 per cent to 3.5 per cent of GDP and, armed with the $12 billion promise, Prime Minister Anthony Albanese will fly to the US next Saturday for the UN General Assembly leaders’ week in New York and a widely expected and much delayed meeting with President Donald Trump.

The investment in the Perth site will be announced on Sunday by Albanese and Defence Minister Richard Marles, bolstering the government’s investment in Western Australia as a defence hub under AUKUS.

It follows an earlier offering of $127 million for planning of the site, and an $8 billion investment in the nearby HMAS Stirling base.

“Today’s investment is another way we are delivering record defence funding to bolster Australia’s capabilities,” Albanese will say. “This world-class precinct will create more than 10,000 local jobs and strong opportunities for local industry.”

Nuclear-powered submarines delivered under the AUKUS pact will use the site for contingency docking, with surface vessels employed by the Australian Defence Force built on site alongside domestic elements of general purpose frigates.

In addition to flying to New York, Albanese is also tipped to fly to Washington for a potential first meeting with Trump and then on to Britain to meet Prime Minister Keir Starmer in London.

Albanese was supposed to meet Trump at a G7 summit in Canada several months ago, but the president cancelled at short notice because of the war in the Middle East. The pair have spoken on the phone four times.

There has been significant pressure from the US administration for Australia to raise its defence budget beyond the current level of about 2 per cent of GDP to 3.5 per cent, led by Hegseth. Albanese has resisted the move, saying the defence budget is a matter for his government alone to determine.

The increase pushed by the Trump administration would cost the budget an additional $210 billion over the next decade, and bring defence spending in line with the amount the government already pledges to aged care.

Most NATO nations, apart from Spain, committed to spending 3.5 per cent of GDP on defence earlier this year, and up to 5 per cent with the inclusion of defence infrastructure. Australia’s spending on defence rises to about 2.8 per cent, by some expert estimates, when infrastructure spending is included.

The decision by US Under Secretary Of Defence For Policy Elbridge Colby to order a review of the AUKUS submarine deal, amid concerns the US could not meet its own submarine-production needs – let alone Australia’s – has heightened concerns the deal could be scrapped.

But defence sources who asked not to be named have told this masthead they believe there is little chance that Colby’s review would lead to the scrapping of the AUKUS deal. Instead, they suggested, the AUKUS review was being used as leverage to pressure the Australian government to spend more on defence.

On Saturday morning (AEST), The Washington Post reported that Rubio had privately assured Marles that the delivery of Virginia-class submarines – expected to begin arriving in the early 2030s – would go ahead.

Defence Minister Richard Marles (front, second left) at the announcement in 2024 of the Henderson Defence Precinct in Western Australia.

The conversation was verified by six people familiar with the matter, according to the Post. Marles’ office declined to comment on the report.

Albanese’s promise of a $12 billion upgrade to the Henderson facility – ahead of an expected and overdue first meeting with Trump – is likely to be warmly welcomed by Trump, Colby and the broader administration.

At present, the US Navy has a force of 48 attack submarines and, at any given time, about 16 of them are offline and receiving either scheduled or unplanned maintenance. There are four shipyards in the United States that can service those submarines – in Maine, Hawaii, Washington State and Virginia.

The upgrades to the Henderson base – in particular, the construction of a graving yard – would mean the Perth facility could be a fifth site for the US Navy, working with the Australian Navy, to undertake the periodic deep cycle maintenance that all submarines need.

Graving yards are expensive to build but are a form of dry dock that allow work to be undertaken on a submarine while it is completely out of the water. Typically, once built they can operate for a century or more and could be a lucrative long-term investment for one of Australia’s big superannuation funds, for example, to help fund and build.

In May, former home affairs secretary and former deputy defence secretary Mike Pezzullo urged the Albanese government to promise such a facility to help clear the backlog of US submarine maintenance and suggested Australia should acquire uncrewed underwater combat vessels to become an “undersea naval superpower”.